How 3D Printing Is Impacting Business

Hans Thalbauer

3D printing is disrupting the way we source products and do business around the world. What was once viewed as a distant possibility is now very much a reality. Companies across all industries should be looking at how they can leverage 3D printing to improve processes and stay competitive.

Logistics company UPS, for example, is already investing heavily in 3D printing in anticipation of its effects on the logistics industry. NASA and the U.S. Army are exploring the use of 3D printing to print food in space and customized food for soldiers. Other smart companies will follow suit or risk going out of business.

When it comes to 3D printing, it’s important to take a broad view. Instead of simply thinking how you can leverage it in one aspect of your business, innovative leaders should think about all the ways they can leverage it.

Even if you don’t think 3D printing applies to your business, or your company has nothing to do with manufacturing, keep in mind that soon many of the products and you will need to buy in the future will be 3D-printed, which will likely impact the speed of your business and how you source products and materials. The true disruption of additive manufacturing won’t be in individual products or spare parts. Instead, it will be in business models and markets.

Here are just a few of the broad range of functions additive manufacturing has the potential to transform:

Warehousing and inventory — On-demand additive manufacturing obviates the need for large investments in warehousing and inventory. According to the U.S. Census Bureau, U.S. businesses alone currently carry $1.8 trillion in manufacturing and trade inventories. A reduction of just a few percentage points could save billions of dollars in costs, which can expand sales margins, be passed on to customers, or both — good for manufacturers and consumers alike. At the same time, manufacturers will need to rethink their current investments in large warehouses.

Service depots — Manufacturers and service providers have largely invested in centralized depots to service durable goods and other high-price products, especially in consumer goods and IT equipment. But as production becomes more individualized and spread out, these centralized service depots might not make sense. When replacement parts can be manufactured on demand close to the customer, there’s less need for investment in service hubs.

Innovation and prototyping — While two-thirds of U.S. manufacturers are using 3D printing for final products, more than half are using the technology for prototyping, according to PwC. This means that even if a product will never be produced through additive manufacturing, the approach can dramatically speed innovation. This can impact R&D functions, which will have to become accustomed to faster design cycles. 3D printing will also give voice to the underdog, giving startups an opportunity to outcompete established rivals.

Imports/exports — With manufacturing happening near the customer, many major import/export taxes and related costs can be avoided. Shipping costs, as well as associated CO2 emissions, can also be kept to a minimum, which will be a strong selling point for some customers.

Additive manufacturing could also overturn assumptions and cost models for where to locate production facilities. For example, instead of operating or outsourcing to a large factory in an emerging market where labor is cheap, it might make sense to run a small 3D printing facility in the target developed market. Or, rather than manufacturing in established technology corridors and then shipping to emerging markets, it might make more sense to locate production close to sales in every market.

Intellectual property — One thing companies should be wary about when it comes to 3D printing is that this new marketplace will essentially give consumers the opportunity to become manufacturers themselves. Consumers will be able to access 3D printing files. They can use those files to produce their own products and replacement parts, or share those files with other consumers. They can even modify 3D printing files to make improvements to your products.

It’s important to think about how you will protect your intellectual property for the products you design, as well as your revenue streams for the replacement parts you produce. In some cases the solution might even be to forge close relationships with such “prosumers,” encouraging knowledge sharing and making consumers active participants in product design.

Shipping — Shipping and logistics tend to be the industries that come to mind first when we think of 3D printing. Imagine being able to take an Uber-like approach to on-demand local delivery, making “last-mile” shipping up for grabs. Additive manufacturing allows product makers to place production physically closer to the customer. That can disintermediate not only major express-delivery companies, but everything from international container shipping to regional freight forwarding.

Customer relationships —No matter how you use 3D printing, the mere idea of it promises to affect customer relationships in a variety of ways. For starters, it can transform who owns the relationship between your brand and the end customer.

Consider the example of a fashion brand that has been selling only through retailers, with no direct contact with consumers. With 3D printing, consumers can now order individualized products, causing the company to rethink its strategy. Maybe it will choose to disintermediate retailers or partner with retailers to help enable them to accept custom orders. In either case, companies need to do more than simply use 3D printing to produce an on-demand, individualized product. They also need to invest in the entire infrastructure to capture and fulfill custom orders quickly and seamlessly, which is a new mindset for many manufacturers.

No matter the industry, 3D printing will impact the way we do business. With the industry expected to be worth more than $10.8 billion by 2021, forward-thinking companies are viewing additive manufacturing through all these lenses. Smart innovative leaders are already realizing the true implications of 3D printing and leveraging those insights to maintain an advantage, and those that want to stay competitive will follow the same initiative.

Find out more at SAP Leonardo Live on July 11 and 12 at the Kap Europa Congress Center in Frankfurt, Germany. The event will bring together a vibrant global community of up to 1,500 IoT, manufacturing, supply chain, R&D, and operations decision makers, influencers, analysts, and media. Learn firsthand from more than 50 SAP customer showcases how to connect IoT and core business processes to achieve digital transformation.

Hans Thalbauer

About Hans Thalbauer

Hans Thalbauer is globally responsible for solution management and the go-to-market functions for SAP digital supply chain solutions and the SAP Leonardo portfolio of Internet of Things solutions. In this role, he is engaged in creative dialogues with businesses and operations worldwide, addressing customer needs and introducing innovative business processes, including the vision of creating a live business environment for everyone working in operations. Hans has more than 17 years with SAP and is based out of Palo Alto, CA, USA. He has held positions in development, product and solution management, and the go-to-market organization. Hans holds a degree in Business Information Systems from the University Vienna, Austria.